senator john grasso and democratic representatives peter welch of vermont. and we will examine the president's budget will run -- ron haskins from the brookings institute. " washington journal" is next. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> it has already passed the senate with a supermajority of 60 votes. and now it deserves the same kind of up or down vote that was cast on welfare reform, that was cast on the children's health insurance program, that was used for cobra health coverage for the unemployed and, by the way, for both bush tax cuts. all of which had to pass congress with nothing more than a simple majority. i therefore ask the leaders in

both houses of congress to finish their work and scheduled a vote in the next few weeks. host: that was the president yesterday challenging members of the house and senate to bring his health-care package to a final upper down vote by a simple majority in the next couple of weeks. our phone lines are open for your reactions to this final push on health care. as the president asks for a final health care vote. a good thursday morning to you. i guess you should buckle your seat belts for lots of health care advertisements over the next couple of weeks. in washington, let us take a look at some of the reporting about the challenges for leaders

on both sides to bring this to final passage. in "the washington post" this suggests gop opportunities to block reconciliation in the senate will be numerous. the minority party may offer an unlimited number of amendments and challenged provisions that did not have a clear impact on the federal budget. restricting the bill's contents -- "the financial times" looks at the house of representatives and the challenge there for a simple majority vote. in a story headlined -- the tricks up pelosi's sleeves. here is more from "the financial

times." one of her most powerful tools is her ability on committee assignments. these are highly coveted positions in use the granted by seniority.

these are some of the tools the speaker can use. the editor of the cook report -- that is where it stands in the house and senate. we would like to talk to you. let us begin with a call from memphis. democrats line. caller: yes, i agree with president obama. we need to have this. we are bringing foreign aid for people who have health care for all of their citizens and we don't have. i was in sudan in 1982 when i was visiting, i got health care for free. i went to a local clinic and

hospital. we can all see president obama is trying to do something for all of us. when he helps all of us, he is going to help those who are in business and who have money. we can pay for our health care just by cutting the aid we send to israel because they already have health care and place and we should have hours here, too. i think his ratings are really up. i think everybody will say he is trying to help us and i want to move forward before they try to pick off everyone around him. host: just one fact. you said we can pay for health care just by cutting aid to israel? we spend about $3 billion a year to israel and the cost for health care reform is a bit higher than that. caller: well, $3 billion has been reported. i have seen reports as high as $12 billion. host: thank you for your call. you made your point about why you think of care reform is needed. republican, joe, was over,

maryland. caller: i appreciate your question to your antisemitic caller. i do believe that the hubris and the arrogance of this president jamming the health care bill down our throats when it is perfectly clear that a majority, a vast majority of americans do not support it, it is an example of extreme arrogance on his part. and i do suggest that people -- it will come back to bite him in the november elections. i heard two reports last evening. i do not know if you heard the reports yet. at 6:15 p.m. last night the administration announced the deployment of a judge in u.s. courts of appeal, the 10th district. the judge happens to be brother of eight wavering democrats vote was invited to the white house last evening -- brother of a

wavering democrats. i believe this is a scandal of monumental proportions. i hope that you get some information about it, present it on your broadcast. to me, this is a scandal that will topple the government. that they are in fact buying of votes of wavering democrats in the house by giving out judgeships. host: thank you for your call. let us listen to leader mitch mcconnell and his reaction. >> we appreciate the opportunity to meet the president today and to discuss health care. as he conceded and a number of the majority conceded, there are plenty of good republican ideas. the core problem is of this -- host: obviously that is a quote from earlier from the leader. we will listen next to dallas,

texas, david on the independent line. you are on the air. what you think about the final push? caller: it is kind of ironic because during the health-care debate obama was nowhere to be seen or heard. in fact, the only thing we know for a fact he did during that period it is go to the drug companies and promise them that the government will not try to negotiate their prices downward. it is interesting -- you had someone from montana on about a week ago and he pointed out the fact that while this started as a health care bill, has basically degenerated into nothing but an insurance bill. what it does is hand about 30 million new customers to insurance companies. of course, they are already robbing of the line. that is the main thing. i think obama has waited too

late. thank you. >> back to "the washington post" with a more process explanation as to how this could unfold.

bethesda, maryland, this is our democrats line. caller: good morning. what i am thinking about is, any time you hear one word or phrase spoken to much by the republicans you know there is something going on. every time i hear jam this thing down the throats of the american people and overwhelming support for this bill -- overwhelming hatred of this bill, i get a little bit nervous. i remember back of the time when they were saying there were weapons of mass destruction in iraq and they said that congress voted overwhelmingly to go into iraq and the american people voted overwhelmingly even though it is a lie about the weapons of mass destruction. if you believe republicans, that is one thing. but i now know that you cannot believe what republicans say,

that this is a big lie about what is in this health care bill and that is why we should vote for it because i don't believe them that there is something wrong with this bill. guest: that caller makes reference to the iraq war. interesting in the news, karl rove has a new book that is out and it is getting a lot of pick up in the and newspapers. that is "the new york times." also coverage in "the post"

today. that is a sidebar. we are discussing president obama and the new health care bill. eric, republican line. caller: i am against this bill. i hope that they shoot it down -- stripping and half trillion dollars from medicare, a program already teetering on the brink and threatens the existence of nursing homes, hospitals, doctors willing to treat patients, and the well-being of our elderly patients. my mother is on medicare -- and my disabled brother is on medicare. and as much trouble as they are having with medicare, i think

that is a foolish move. it is disheveling the mutt -- just shoveling the money from medicare right into the insurance company and i believe they are doing that to get the insurance companies to dump plenty of money into their coffers for the election. host: eric mentions medicare. while final versions of the bill have not yet been released, the president says he wanted to incorporate four ideas from the health care summit that came from republicans, which include undercover investigations of medicare and medicaid providers, and the search for waste, fraud, and abuse. experiment with specialized health-care court -- an idea that had been promoted by senators coburn and mike enzi from wyoming. establish health care savings accounts in new markets.

that was suggested by senator john barraso from wyoming who will be a guest later on today. it increasing reimbursements to medicaid providers, a concern raised by senator charles grassley from iowa. let us go back to telephone calls. hammond, indiana, hair roots -- henriette on the independent line. caller: i think this bill should be shot down. a first of all, the democrats have lied. a day did not put all the cost. the doctors cost. they put that in the jobs bill. second of all, the democrats are lying, i don't know about the republicans lying, but read the bills. these people should know, first of all, you are not going to get health care straight away. you are not going to get it. you will wait four years but they will tax you for four years straight. do you go out and buy food you can't eat for four years? let's get real about this year. obama has lied through this

whole process. the democrats have lied. you can't balance the budget when you are leaving out things like the doctors -- they put that in the jobs bill. is that fair? they are lying to the public. and these poor suckers out here, they don't read the bill. what's wrong with them? they are supposed to be educated. let them look at the bill themselves. obama has lied through the whole process. this reconciliation -- when he was senator he did not vote for reconciliation. no, the people would not go for that. now he wants this bill passed and he is going for it. host: ok, henriette, thanks. there is a piece of video that has been circulating around the internet and it involves an event with then senator barack obama talking about simple majority votes in the process of reconciliation. let us show that to you right now and you can decide what you

think about what it says. but here is a perspective of a senator who was considering a white house bid back in 2006. >> one of the arguments that sometimes i get with my fellow progressives -- and some of these have flashed up on the blog community on occasion -- this notion that we should function sort of like karl rove where we identify our core days, get a 50 + 1 victory. karl rove doesn't need a broad consensus because he does not believe in government. so, if government does not doing anything, that is fine with him. if what is happening on capitol hill is controlled by special- interest, that accords with his agenda. if we want to transform the country, though, that requires a

sizable majority. host: then senator obama in 2006. let us go back to your calls. louisiana, this is lisa, democrats line. go ahead. caller:hi. everybody is calling everybody a liar. the dems are calling republicans lyres, they are calling the president liars. we are all getting like to by everyone, from the president to the house, to the senate. they are all lying to us. we are left to navigate the whole health care bill alone. we are left to navigate every bill alone. we are the ones left to find the gray area. we need to know what is going on. no one is telling us the truth. but we have to -- just us. we have to be careful when we vote. because it really, really is important. host: how would you do that?

caller: hopefully -- the one that i called in washington, i would like an answer and i did not get any. host: you call your member of congress? caller: i called congress, senate, the white house communication line. host: what are the pressing questions for you? caller: i want to know why the dems are bashing gop and the gop is bashing the dems and everybody is bashing the president. that gets us nowhere. host: that is the question you asked? caller: that had no opinion. host: how will that help you decide whether health care is the right prescription? caller: it will not, but i want to know why -- he started his speech wonderfully pop -- wonderfully, it was going places. and then all of a sudden it was about the gop this, the gop

that, gop this. i am not going for that again. i'm just not. host: one of the other things that surface, first by politico, ben smith, and it is now being picked up by other mainstream publications is a fund-raising meeting that happens in florida. someone who was at it left behind a power point presentation. here is the headline of the story in " the washington post" that gives credit to politico. we have a couple of the pages. you can go and type and find it yourself. it is a 72-page power point presentation assembled for a potential campaign donors and fund-raisers obtained by politico after being left at a florida hotel where republicans had gathered february 18. you can see the pages. inside, if we could possibly change a few of the pages, you could see some of the direction it suggests. it has, for example, the

pictures -- the depictions of the leaders and the president and congress in this way. and also suggest one of the effective ways to raise money is by highlighting people -- it suggests that fear and extreme negative feelings toward existing administration good reasons why donors might want to contribute to the gop. and it suggests that republican -- mr. steele did not attend this meeting. he said he had not been aware of the documents, according to a spokesman. and he said in the statement that these kinds of things will not be used by the republican national committee in any capacity in the future. let us go back to telephone calls and listen to your reaction to the president's request for a final vote, up or down vote on health care. dick is next, republican, houston. caller: how are you doing, susan? host: i am well.

caller: thank you, c-span. i appreciate the special you all ran with michele obama. it was great -- about growing your own food and stuff. ms. obama, i know you have to push the agenda -- but you can present the stuff you want to present just like you did in that special. it was people of all colors and it was fantastic. on this health-care thing, i don't blame the insurance companies, because right now america, you are going directly against god's food laws. the the type of food you are eating, i would not blame the insurance companies for not wanting to insure you because you are going to die. now, i tell you something, they will give you insurance -- if you are healthy. why? you will live another 50, 60, 70 years and they can use your money to party in the bahamas.

if you fix the food, you won't need the health care bill. host: hour earlier caller talked about the appointment of scott matheson. . is a report on this -- his brother is utah's lone democratic member of congress. baltimore is next. anthony, democrats line. caller: thank you for the call. i want to say that people really

need to understand that the republicans are owned by the insurance companies. that is their money. that is how they get their money, is from the insurance companies. the insurance companies are owned by the republicans and the number one thing is, they are against obama because they are cutting out their money. so, we've got to five -- understand that they will lie, cheat, and steel to stop obama because the insurance companies are telling them to lie, cheat, and steel. the insurance companies own the republicans. they will lie. you better follow obama because he is doing something for the people. and anyone with a good sense of common sense -- will see the man and understand he is doing it for the people and not the insurance companies. that is all i got to say. you've got to judge the man and realize he is doing it for the people, even the people who are against him are going to benefit. host: anthony from baltimore.

on twitter -- echoing the themes from the last caller. the next is a call from chester, maryland. mary on our republican line. what do you think about this final push for health care vote? caller: thank you for taking my call. i am a republican. i do not own an insurance company. as unemployment numbers grow higher each week it makes no sense to invest some time on the government taking over the health care system. most americans are worried about getting a job or losing the ones they have pared -- they have. it give americans jobs and they will pay not only for health care but are mortgage, food, and children's education. thank you. host: than in maine on twitter says --

next call is missouri. this is elaine on our independent line. good morning, your comments. caller: good morning. myself, i am 56 years old. my husband is 57. my husband is employed at a local printing company. our health insurance is skyrocketing every single year. we have gone from a fully paid employer-based system to a health care high deductible health care savings account. if my husband loses his job, there will go our health care because of our ages and are pre- existing conditions. -- our pre-existing conditions. this is the only thing that will save the middle class from falling to a third world nation. host: later on in the program we will have senator john barraso from wyoming who is a physician

and a supporter of health care savings accounts. what would you like to say to him directly? caller: my husband and i, we put away what we can. we are not wealthy people. we put what we can and help savings account. we have to ration what we get done. host: thank you. kettering, ohio. jackie on the democrats' line. caller: i agree with the prior collar completely because i'm a single payer advocate, and the public option would have been my compromise. in this legislation, neither one of those strategies are included so i am not going to get everything i want in this legislation. i'm a christian. i want everybody covered. i want everyone to have access. i want it to be affordable. we are not going to get everything we want, some of

those who are for the public option. absolutely. but this is a moot point for both sides, so of course i want to see it happen. i wanted to make a comment on karl rove possible, why would anybody buy a book of karl rove. he is a pathological liar. in regard to the pre-war intelligence there were two investigations, phase one and two -- all of these characters who cherry pick and disseminated that false prewar intelligence, hundreds of thousands of iraqis are dead and injured based on the false intelligence. why would you believe anything that karl rove, cheney -- these guys out said valerie plame, the undermine the national security and why would we believe anything they say. host: jackie, let us send us off with a health care call.

good morning, thank you. would he think about health care? caller: i am afraid it will do the same thing that chris dodd did with fannie and freddie, bankrupting this country and the banks. my son came up to me in 2003 and said he wanted to buy a house. the of money for downpayment? no. closing? know. how would you buy a house? i can get a five-year interest only loan after five years -- i said, it sounds pretty good. but you never know what the interest rates are going to be. i said it is the worst kind. he did not by the house, thank god. the house he was looking at for 300,000 is 200,000 two years ago. there are a lot of people who are going to lose their homes. instead of this problem they will make another problem. as far as the war is concerned, i think it's the best thing that ever happened. i iraq now has a government -- the maniacs are all gone.

afghanistan the same thing. we're killing the taliban. what more do you want? now the middle east is a safe place -- it had been a lit fuse since jimmy carter grin at eagle was the right thing. as far as health care, i am afraid of it. host: your comments and your connections to fannie mae and freddie mac are a great leap into the next desk. we will have opportunity to talk about it. john barraso from wyoming will give us the republicans and a perspective and his own thoughts about health care savings accounts. later on, it o'clock 40 5:00 a.m. eastern time, congressman peter welch, a democrat at large for cultural45 a.m., congressman peter welch, a democrat. separately he is moving a piece of legislation, a bill he is sponsoring the the coalition introduced yesterday to allow the government to negotiate drug prices for medicare part d

participants, which is not currently allowed. we will learn about that specific proposal from him. more health care discussion had. as promised, we will move on to the financial markets. on your screen is gretchen morgenson -- with "the new york times" and a regular columnist and in 2001 a pulitzer for coverage on financial and business stories. thank you for being with us this morning. we are hearing the white house says they gave more details on what they would like to see on financial market regulation and we hear senator dodd is being prepared to move forward on his committee with more last-minute negotiations. before we get to the fixes, i wanted to ask you, and all of your reporting over the last year and half, how the people who need to have consensus reached consensus on the root causes of the financial meltdown? guest: i think there is a core

group of people who really understand what happened and how the actions led up to it. it is extremely baffling, still, to many people, including myself, because we really still have not gotten to the bottom of all the different activities that were so poisonous and they're really contributed to this mess. but i think there is a core group of people that does understand that has ideas for fixes, but unfortunately they are not in positions of power necessarily. what we have is, people talking about reform that is very unsatisfying to mean and does not really address the crucial issue, which is how to rein in companies that become too large to operate safely. that is something we really have not even heard a peep about. since that is a heart of this problem that is behind the bailout of aig, behind the

assistance provided to citigroup, etc., then we really have to deal with that first. host: of you suggested in your columns that the number of companies that are too big to fail have been a growing sense of the financial crisis. guest: before this, we really did not have in place a promise. it was all sort of an implied government guarantee. the closest thing we had, of course, was fannie and freddie, which your previous caller described. they had implicit government guarantees because they were part of this idea to promote home ownership and reduce the cost of home ownership. so they implied federal guarantees, which made it easier for them to raise money in the debt market, cheaper to raise money. and of course, we saw how badly that ended up. now we have implied guarantees after bailing out aig, after

merging their stearns with j.p. morgan, after all of these banks that have failed. we now have this idea that if a company is too big, too interconnected, to politically connected to fail, then it will be bailed out or rescue. host: can you talk about the political connections? the phrase he had been using is too big to fail has become too big to tackle. i am wondering if you could talk about how much of that is complexity, difference of philosophy and how much is influence in washington from political contributions? guest: that is the $54 trillion question. it is that the " to separate out. i think the reason it is useful to go beyond to big to fail is that this is not just a problem of size. there were companies that received assistance that was not as large as citigroup.

so it really had gone beyond that. the interconnectedness' which, of course, is a big factor in our financial markets today, where you have an insurance company like aig that had all of these contracts with other banks and other financial institutions, that if aig was allowed to fail, would really harm potentially those of other institutions. that is where you get the interconnectedness'. now, but the little -- political connectedness aspect is much harder to plumb. i think you could look at campaign contributions. but as always, with these things in washington, it is much more opaque and much more shrouded in mystery. one thing i will say, i'm a financial reporter and i have covered wall street for decades. and wall street is nobody's idea of a transparent in fact, they

try very hard to make things more complex and difficult to understand so they can proffer from that. once the story moved to washington, it became much harder for me to report about. it is just way more opaque. contrary to the idea that obama was going to have a very transparent administration, it has been extremely difficult to extract information from the government about the various programs. host cut just as an example -- "the washington times" has a front-page story on this very topic. here it is what he is reporting.

was that in example of what you are talking about? guest: absolutely. my hat is off to all reporters to go after the story because it is imperative for the american people to understand the forces that are at work here. it is not that it is new. obviously money and politics have been around since time and memorial. i guess the question i would like washington reporters to answer for me, it will street reporter, is it worse now, is a more pervasive, -- is it more pervasive, is the big money even more corrupting than it was before. what i find fascinating about

this, susan, it -- is these are the people we just bailed out, the people we just rescued from their own bad practices. why on earth are they allowed to swagger around town doling out millions of dollars and hundreds of millions of dollars? we seem to have lost a sense of shame about the entire episode, that the people who created the problems are now on top and are now sort of directing what the government should do, and/or very involved in the process. there is something really odd about that, i think. host: abc news has just reported, and you probably already have seen this, a new report has been posted by a group of economists, and all of them are suggesting -- they are suggesting the seeds are in place for another round of a financial hit larger than the one the country experienced in

the past. have you been seeing concern along those lines? guest: of course, you know, we have seen the shift to europe, the concerns about the bureau and the currency over there. we have seen at the increasing problems there with the debt load that many of these bizarre nations have taken on. like our municipalities and cities and towns in america, revenues are falling because we are in a recession. and yet, costs are still very high. so you got a very big squeeze going on and a lot of these countries -- greece is in the spotlight at the moment -- have an enormous debt load that they may not be able to pay off. so, you have this specter of default of entire nations. it may not happen. these are fears -- this may be something the your ozone can work out so greece can be

helped. it is really something that has moved beyond just the bad banking practices -- like home mortgages backed never should have been made to people who have no ability to repay them, and it is now in this very -- rather large a situation of entire countries that have gotten themselves into trouble using to much debt and not really being disciplined in how their costs are managed. yes, i think it is growing larger, but again, if we don't deal with the two interconnected companies that will not be allowed to fail, then it will guarantee we will have another crisis. it is just a matter of when. host: to our callers. we know there are many ways you can take this conversation, as complex as it is, including action being discussed in washington. we will open the phone lines, e- mail address and twitter.

while you are talking about greece, the business section of the front-page a newspaper, your colleagues have a headline story -- traders turn attention to the next greece. they write that traders on both sides of the atlantic are weighing the risk of potential costs

and it talked about the justice department's investigation did you have been writing about credit defaults swaps and derivatives. the international global traders, the complexity -- if i could say it bluntly, what is a country to do when there are so many people betting against its downfall? guest: there is really something distasteful about it. i agree. the idea that people can take advantage of a country that is in distress or disarray or has mismanaged its finances. but that is the way of the world that we live in right now. of the unfortunate aspect of the greece situation, who is next, and focusing on the next victim or embassy that will be weakened is if you have a currency that is like the euro where you have different countries all into the same currency but all have different strengths and

weaknesses, where you have a real powerhouse economy like germany that is very, very powerful and strong, and then you have weaker economies like greece and portugal, to try to meld them into one thing was a grand experiment and something that is a great idea to try to create this trading bloc of countries that could compete with the u.s. and others. but it really is a question now of whether it can work if you don't have the same disciplines across the board and all of these countries. so i think what we are looking at is a questioning of the idea of the euro, combining all of these different nations, very disparate nations into one zone and one currency. i do believe that the use of credit default swaps is something that really has to be examined. it has absolutely not been addressed by any of the so- called financial reforms that we

have been seeing from either side of the aisle. these things must be traded on an exchange. they must be transparent. they must require margin, that you put up money. you can't just sell these things with abandon and then when the world expos, expect to collect your money on them. it is a kind of instrument that can be abused and has been abused and really central to the crisis that we are still living through. no one has taken this examination of these instruments down the road to, how can we defang them, defuse them, not give them weapons of mass destruction in the financial world.

host: let us begin with travers city, michigan. a bruise on the republican line. caller: thank you for taking my call. i agree with my statement that you just made about a social experiment, and quite honestly, i don't appreciate the united states government subjecting us to that experiment through nafta and sending our jobs overseas. but to get back to the fannie mae and freddie mac -- not much said about ginnie mae. it seems like 90% of the mortgages are underwritten by these three agencies, which my understanding they are owned by the federal government primarily. and since they are the ones that basically took these mortgages and bonds of the securities and sold them to the open market,

and once they began to default, they had no choice, the u.s. government if had no choice but to bailout aig because they were the ones who were behind it. i would like your comments as to what i just said. thank you. guest: ok. aig and fannie mae and freddie mac are somewhat related but it is not a direct relationship. what aig was doing that got it into trouble was writing insurance on mortgage securities like those that fannie mae and freddie mac put together. but mortgage securities that were also put together by wall street. so, it did not necessarily include loans that fannie and freddie had purchased and securitized. so these were loans that wall street put together into these really mind numbing securities called collateralized debt obligations.

a what aig was been sharing was the very highest level, the very aaa and above best possible loans in those pools of loans. and when the whole wheels came off the mortgage truck, then those declined in value, the insurance that aig had written -- they had to cough up money to make sure that the counterparties, the people on the other side were confident that they would receive their money on the insurance. that is what drove aig off the cliff. so, it is not a direct relationship between fannie and freddie, not a huge direct relationship but, yes, they are definitely linked because they were all part of this incredible mortgage boom that was designed to kind of promote home ownership and yet wall street sort of took the ball and ran with it and really, really went

far beyond what anyone thought we would ever see in the way of losses in these kinds of loans. host: john, democrats line. caller: the conservative investment -- pension plans in serious trouble. i find it ironic that the little amount of money that the pension plans might need to be stabilized is pennies compared to the money we have been throwing to the corporations that caused the problem. how implicit are the trustees of these plans allow to be sucked in by the returns they were promised? guest: thank you for the call. i think it is very hard, again.

a wonderful line from reporting for adventuresome reporter to pursue, i would love the answer to that question. as you know, many of the people who run pensions are not necessarily astute financial experts. they rely on their wall street advisers to give them guidance on what to buy, what to sell, what direction the economy will go in. i think that we have a situation now, as you point out, where many of these people were duped. and many of these people were sold things they didn't understand. it and to some degree, you have to say to them, well, if you did not understand it, shame on you. but when you are talking about pensioners and the cost associated with having to shore up a pension funds, that is a huge problem. it is not just like going to an institutional investor saying, you should have known better, take your lumps.

these are people relying on their pensions to be able to have an enjoyable retirement. so, i have an idea that some of my forces have given to me and i think is a wonderful idea on how to deal with this, and that is to make pension funds -- have the wall street firms required to approach them as a fiduciary, if to approach them like they would air retail investor and not as sophisticated. because some of these people are not and they did not understand this complex derivatives. so if you have a role in place that says wall street firm xyz is dealing with a pension fund, they have to bring the same level of fiduciary duty as they do to a widow or an orphan or very unsophisticated retail investor, then i think you might get rid of some of these problems of them being suckered

into securities station not be buying. host: i wonder if you could respond to this twitter message for someone -- guest: i hear that a lot from people. it is an unfortunate, i think, result of the lack of leadership that we have seen on these issues from washington. i think that it is a natural response and extremely unfortunate because there is a lack of trust in our government to begin with and now we have this incredible crisis that we have lived through, which is only adding to the sense of betrayal that many americans feel from the government. i would say this is a theme that i hear very commonly from my readers. and it is hard to argue with it

because you see the government helping the banks, you see then bailing them out to billions of dollars. you see this report you just mentioned about treasury. what are you to conclude otherwise? there are two sets of people in this country, the powerful, the people who have lobbyists, and then the rest of us. so, i totally sympathize with the writer of that message. host: if a cut is next. al on independent line -- ithaca is next. caller: i lost my trust in government act i was sent to vietnam a few years ago in the mid-1960s. but it is always a matter of trying to understand how we got there -- or how we got here. one of the questions regarding the financial situation right now that i wonder about is, the

banks have caught a lot of criticism for the bailout and the tarp funds that have gone to stimulate the economy. why isn't anybody talking about the military budget -- or not too many people talking about it -- and the use of the military budget, to stimulate the economy, but nothing but waste production. whereas the banks were bailed out at i guess $700 billion a year ago, why that is what the military gets every year practically. i would like to hear more discussion. i know "usa today" three days ago had an article on the oversight of military contracts being done by people who were connected to the companies who were doing the military production. guest: unfortunately i'm not a military reporter, but i completely agree, i think that

one of the reasons why the financial crisis is so long lived and really continues to disparate people is because we have so many costs coming due at the same time in this country. if we just had one of these elements, maybe we could deal with bit -- with it and the economy would start to come back. but we have a very expensive military, as you point out. we have now this crisis of confidence in the financial world and banks are not lending, so you therefore don't have the kind of economic activity you need to get the country rolling again. and then, of course, you have this issue of how much you are going to spend on health care. we have really a lot of very expensive issues that no one has been able to address and pared down. it is just a ballooning the

deficit. while that is something that can be worked off when the economy turns around, it really is so much larger than it has been. it is very, i think, worry some, and rightfully so a lot of people. host: next question or comment comes from a twittered -- guest: again, there is personal responsibility that must be addressed. that people who took out loans on homes they could not afford, that they knew they could not afford, that they were just waiting for the home price appreciation to bail them out. there was a lot of that. but whenever people last may about that question of these questionable loans -- but whenever people ask me about that question of these

questionable loans, but who is at fault, i think it really was the bank's more than the bar wars. here is why. we heard about all of these crazy loans that were made, no income, no assets, no jobs, ninja loans. they were thrown at people -- if you have a pulse, you could get a loan. what i learned in my reporting is that banks could have checked the incomes of all of the people applying for these loans because with every loan file that was produced, there was a form you had to design that allow banks to go to the irs to verify their income. those documents were dutifully signed at every closing because they had to be, but they were filed in the circular file and the banks never went back to the irs to check on those incomes. had they done that, i think we would have seen far fewer

troubling loans and far fewer losses. when people ask me, you know, responsibility, yes, i agree it has to be shared but i think banks were in a position to be able to crack down on the practices but they like the fee income, they liked the money they were making and that was too compelling. host: what is the role of government policy -- that pushed the banks to make low-income housing loans available because the policy was going to increase home ownership for the social benefits of it? guest: i think you have to have checks and balances. if you are going to promote something like homeownership, you have to have a cop on the beat who is going to make sure that these kinds of loans you are making to people are not going to track them -- trap them in houses they cannot afford and they were going to have to leave and have a huge blemish on their credit rating. you do need to have regulations. if you are going to have a full

throttle offered by the government to promote home ownership, let us just make sure that the people who are getting into these homes actually can stay in the homes. because it does not do anybody any good -- as what we are seeing with the foreclosures and the default rate -- it does no one any good to have them fail. it is like pushing children in school who cannot read and write to the next level. it does them a disservice. same thing with these borrow ers, you have to have a cop on the beat and we did not have that. host: scott, a republican line. caller: good morning. it is funny, i hear this argument quite a lot, the greedy bankers. and they do bear a lot of blame for -- for their involvement. but the component of the government being involved, almost to the degree of forcing

the banks to take these practices. it is sort of marginalized. it gets brought up briefly, yeah, that is that component but then pushed aside because it is easier and more expedient to blame the big, greedy bankers of their on wall street. it is kind of ludicrous because if you really want to trace the origins deacon go all the way back to the 1970's and the community reinvestment act and all of the policies. as a side note, people said no one saw it coming but it is not true. if you go back, economists like walter williams and thomas soul who get marginalized -- there was a day pbs special by walter williams, an entire hour or two special discussing the coming doom being caused by the community reinvestment act and government involvement in general and private enterprise. the whole thing, if you go back and read it, it is creepy

because he pinpoint exactly what was going to happen. and he has been calling for it for decades. i have been reading his work, as well as others, and the root of the stresses of the way back to their. is it was not an eight-year thing that just happened under bush. their roots and foundation of this crisis were laid long ago. and the banks balked at these policies in the 1980's, and by the early 1990's under the clinton administration they were being threatened with lawsuits if they did not implement the policy. host: let me jump in because you have given your pieces and let us have our guests respond. guest: i think there is absolutely so much truth in what he says, that it is not the problem of the last six years or five years or whenever. bloomed full flower in 2003 when the fed dropped rates to 1% and

kept them there for the entire year, far too long. that got the whole lending thing going. but he is right, these ideals, this sort of goal of home ownership for everyone is something that has been at around for a very long time. it just became -- it metastasized during this particular incident and episode. among that it had not done it before, was that -- one of the reasons it had done that and not before was that there was securitization. the government wants more low- income housing, people able to get a mortgage, that is fine, let us put these in these pools of mortgages and sell them to someone else and i will not have the loan loss any more on my book. .

banking has become more interested in the fee income, and generating and loan that is in perpetuity, brennan and being paid back. that was a shift. so yes, it is partly the government doing, but never in much a part of the banking world

and the changes that were made. there is plenty of blame to go around. it is not just simply the government was the only player. host: one of our viewers writes -- we are talking with gretchen morgenson, a financial columnist for the "new york times." she is also the assistant business editor for that paper. georgia, wilson on the democrat line. caller: where is the money coming from iraq's will revenues? -- oil revenues?

guest: unfortunately, i am not an expert on where the oil money goes. i am not going to try to answer that, i am sorry. host: that is ok. charlie on the independent line. caller: this is a result of the savings and loan fiasco. we on bail of the mexican currency, argentina. same old merrill lynch, lehman brothers. all that i know is, even after savings and loan, wall street is the same companies.

the whole thing has been going on for so long, in the name of capitalism, running wild. no wonder there is a bull in the china shop, and the logo of merrill lynch. banks are nothing but swiss cheese. china is running the show. we have been groped for too long. no country will loan us money. host: let me jump in. guest: these are issues that a lot of people believe, and i hear in an awful lot from my readers. there are merelymany elements of

truth in that. we have been bailing out countries before, companies that the government felt were too important to be allowed to fail. this, is addressing that sense of -- caller is addressing that tens of the trail that many americans feel. this is the worst economic debacle since the great depression. still, we do not have financial reform, anything that will prevent it from happening again. instead, we have been around going on where people are asking these minor questions, when intelligent observers of this industry know what needs to

be done. we need to shore up the banks so that they will lend again. we are still in this phase of protectionism. yes, this is not capitalism. what we have just been through it is a way to allow the people running these companies to keep the gains they made, but once the losses came around, that is the taxpayer's. host: we have been talking a lot about issues abroad. let's focus on washington. a reporter says senior republicans have joined negotiations with christopher

dodd -- this discussion is about creating a new division within the fed that would focus on consumer protection. how would this benefit individual citizens? guest: initially, this was going to be an independent agency. the idea was to have an organization that would be charged with overseeing financial products to make sure they were appropriate, that they were not poisonous. so you would not have something like an exploding mortgage where the industry starts at 1% and then jumps up to 7%. even a wealthy person would have trouble with that.

this agency was supposed to be independent, autonomous, have its own power base, but now it has more into something that will be housed in the fed. the fed is the nation's central bank, and for the many past decade, has been interested in monetary policy, keeping the economy growing. the fed has not been interested, in the least bit, about consumer regulation. in fact, it must seem as something that someone else should take care of. i have a problem with the consumer protection agency landing within the fed, an organization that not only has little interest in the consumer, as demonstrated by the last two decades of avoiding any

duty to the consumer, and now we are going to put this in the fed, whose high level people did not see this coming, did not respond to the subprime crisis, did not have an inappropriate response and helped to create the problem? i do not know why that is a good idea. host: bloomington, indiana. bud on the independent line. caller: i do not think bankers are inherently evil people. i think the lending regulations, they were relaxed, and cd of less -- and cdo's were created to bring growth to the economy.

strengthening regulation will not solve the underlying problem. the underlying problem is declining incomes. unless something is done to address declining incomes, regulation will not put this economy on the right track. it has to do with economic policies. guest: i would agree with you 100%. i have never said that we need more regulation. it was my opinion -- and i look at the rules and regulations often. we had rules on the book that could have stopped this, but they were not implemented. so what you have is a circumstance where there were plenty of regulations on the vote, regulators did not have an appetite to regulate. i do believe, if you have a growing economy, you will be far

better off, but you need some policing mechanism. this last episode indicates that we have nothing, and on in that realm. it was sort of a banker's world view. i agree, they are not evil people, but you need to have some balance. if you want to promote lending, prosperity, by giving banks special breaks, then you have to have come on the other hand, a policeman who has some sort of drive war motivation to do their job. host: leesburg, virginia. robert. caller: i was a loan officer in 1994. it was interesting to watch,

from the top down, everyone turned a blind eye to everything. lenders would come in to talk to us and say that we can do this, we can do that, and every year it got more aggressive. no income, the whole 9 yards. banks did not need to even check with the irs to verify income. everyone knew about that. the title company was in on it, too.

appraisers had to appraise the value very high. they could not talk about the negative aspects of the loan or they would not get the business. there were checks and balances across the board. we saw countries -- companies like countrywide, you could not get a rate that was close to them through fannie mae or freddie mac. host: thank you. guest: you should write a screenplay and a movie. there would be a lot of people

who are interested in what you know. host: same theme, with banks, the kind of advice they are giving to clients, was captured by a colleague of yours in a peace in the "to your times" -- -- piece in the "new york times." " -- she writes the story how banks were less about the advice and more about the sale. guest: again, a disappointing aspect of the so-called reform movement moving through washington. you start with something that sounds like it could be good, but the people on the other side

that do not want it to happen -- there is nothing wrong with lobbying. they want to get their opinions known. but when it starts to color what could be a good bill and defang, become useful for consumers, then it becomes problematic. host: i hope that you will come back to speak to us from time to time. we appreciate it. look for gretchen morgenson's in the "new york times." last thursday, one of the invited speakers was senator john barrasso. after a news update, he will be here to talk about the health care legislation process. >> with catastrophic plans, they

do not go to care until later. i say, the people with, the trumpet plans are the best examples of health care and the way to use your dollars. lots of people say, my knee hurts, maybe i should get an mri, and then i asked, does my insurance cover it? if i say yes, then they want to do it, and if not, they wonder how much it costs. that is why people with catastrophic health problems are the best consumers to look to for health care. >> here is more on health care from capitol hill this morning. michigan democrat bart stupak speaking earlier says he and 11 other democrats will vote against the overhaul bill unless

a provision subsidizing abortion is removed. he says the version in the senate has language that would permit the government to "directly subsidize abortion." the administration argues president obama's bill would retain existing restrictions on federally-financed abortions. another bombing in iraq today targeting voters killed seven people. insurgents had repeatedly threatened using violence to threaten the election who will determine who will oversee the country as u.s. forces go home. the head of the united nations mission in afghanistan in his last news conference before leaving says it is high time a political solution is found to the taliban to resolve this conflict. speaking earlier, he says it is time to talk with the taliban.

the u.s. ambassador to russia, in remarks earlier, says a silver medallion that must colon from a russian czar has been recovered and returned to moscow. he says that this signals a increasing trust and cooperation between moscow and washington. host: as we promised, we had senator john russell of wyoming. he has spent many years as an orthopedic surgeon. he has been very much involved in this discussion on health care. we just saw a clip from him, the white house healthcare summit. the president said he plans to include four gop proposals into

the bills. would you vote for it? guest: i would for those four things, but not on the entire bill. this bill is terribly flawed. it is not the right way to go for this country. right now, the president is pushing a bill, which passed the senate, to go through the house. host: if legislation passes, what is the likely of, or health care? guest: it is not just me, it is other physicians, colleagues, and the kinds of things i have seen across the country. do you think the cost of your own personal health care will go up when this passes? everyone believed that it will. then you ask, do you think the

quality of your care will go down? everyone's hands go up again. most americans believe that the cost will go up and the quality of their own care will go down. there is $500 billion in medicare cuts for seniors. the increase in taxes. the president wants to put 15 million more americans on medicaid, which is a failed system. half of those doctors will not see the patients. this is an incredible drain on the states. that is why republicans, democrats alike are opposed to this. you just showed congressmen stupak and the abortion issue.

as one democrat said, it is a do-or-die. if they do this, they will die politically. it will become the issue in every political race in 2010. host: we are going to open up the phone lines for you. you can send us a twitter message or an e-mail as well. let's talk about health care savings accounts. how do you think that is an advantage over where we are now? guest: this is an option that all americans should have. everyone in the country should have the same options as members of congress. in indiana, 30,000 state employees, 70% of them have chosen health savings account,

which puts them in charge of the decision making. they are the best consumers of health care. gov. daniels talks about the fact that they are more likely to ask their doctor, can i take a generic, where it is the best place to get this procedure? they are the most likely to go to the emergency room, according to this editorial, because they know they are using their own money. doctors will tell you that there busiest time is the week before new year's after christmas. i remember this year i did a operations. they came in before christmas, and that their deductibles, and they wanted to get this done after christmas but before new year's because it was time for their free operation. they are wise about spending

their own money, but there are not focusing on that when it is the government's. if there is more skin in the game, they make more thoughtful decisions. that is what the president talked about a year ago, getting the cost under control. it is also what warren buffett said on monday. they should get rid of this nonsense and focus on the cost of care. the president talks about coverage, which does not equal care, and we can get into that. health savings account makes people more responsible for their own money. host: the counter argument is proposed in "the atlantic." and the argument comes from the brookings institution. he writes --

guest: he is right when he says this is not the silver bullet. it is a combination of a number of things. having patients involved in wellness is good. people in wyoming can go to get a blood test it, cholesterol,

diabetes, it is all aimed at helping people stay more healthy and keeping down the cost of their care. in wyoming, the state government will pay for that for state employees. medicaid will pay for that four people in medicaid. medicare will not. they have done a terrible done with prevention and promotion. i was shocked to see that medicare will not pay for a blood test because they call it a screening. if someone says that they are light headed, they will spend thousands of dollars for cats can but they will not pay for preventive screening. we need to focus on prevention. this health care bill does not focus on that. there is a section that deals with prevention, but it talks about building sidewalks and the jungle gyms.

it does not give any incentives to the individual on the couch to get up and take a walk. we need to indiana send those people who take this possibility for their own health, give them incentives for improving their own health. it certainly helps save a lot of money in indiana. host: just in that one example, the $20 -- first of all, does this cost the cover of the tests that you mentioned? you give an example of the $20 fee being supported by government programs. guest: the state of wyoming has said this is a good program. host: ok, let me finish. state employees get subsidized

for it. guest: the state said this is good use of early prevention, early detection. host: so the people supporting the public option say that, if the government supports this, why not for everyone? guest: i think you are talking about apples and oranges. a public option is basically a government-run insurance program. host: there are different ways to describe this. guest: the president wants to put 15 mormillion more americann medicaid. half of the doctors will not see those patients. the mayo clinic, which the president highlighted -- every hospital should be let them. he was fairly shocked when they

said, we do not want to take medicaid patients anymore because we cannot keep our doors open because the government reimburses so low on that. as of january 1, they do not want to take any more medicare patients either. so what is wrong with this picture? if the mayo clinic is the way that it works, as the president said, but they do not want to do with the programs that the government has put forth for our seniors and medicaid patients, then there is something wrong with this approach. even the congressional budget office says that if this goes through, one in five hospitals will not be sold at 10 years from now. host: let's get to some questions. al on the republican line.

caller: i am going to give you some food for thought, and i want you to take it back to the rest of the senators. primarily, the cost of health care is because of all the people that go to the hospital to get service but pay nothing. to many people in the wagon, too few pulling the wagon. republicans should be talking about -- the start with the war on poverty. -- this started with the war on poverty. item 67, i pay into social security. i am still working full time the problem today is personal is

possibility. where i work, most people on subsidies but they have 50-inch televisions, they have cars, computers. i do not want to pay any more of my tax money would do nothing to contribute to this country. that is the problem. host: thank you. guest: i appreciate your comments. you are in rhode island, right next to massachusetts, which has the highest per capita number of doctors of any other state. they also have the highest interest rates. now the governor of massachusetts says he wants to start limiting what they pay for care, limiting options. what was supposed to be in massachusetts miracle for health care has been proven, that if we

ended up with that kind of program, we would have something more expensive and more problems somproblematic. now you have a waiting. just to see a doctor. you also talk about who is getting care. in maine, they had a health care plan. for someone in their late 20's, insurance costs are twice within are in new hampshire because of the loss in maine, and they have a community rating, everybody pays the same rate, so what we are seeing is the more government gets involved, it is not necessarily for the better. host: sterling, virginia. you are on with senator russell

-- grassbarasso. caller: i consider myself to be very smart when it comes to pricing. last summer, my son fractured his hand. we went to one hospital and it was more crowded. do i go to the more expensive hospital and be a good father? do i pay money into my health savings? guest: basically, you have

several options. you can make your own decisions. for people with health savings accounts, and as we have said, it is not a silver bullet, but it works really well for non- emergency situations. you are talking about an emergency situation. i think you said your daughter had broken her hand. do they need to go to an emergency room, can you go to a the urgent care center? there are different options, and you can choose that based on the severity of an emergency situation. but 90% of doctors in the country are for routine health care. that is where you have more time to make a measured response and shop around, and save money. host: mary on twitter asks --

guest: i think the trend all be patient-centered. it should anti-government or insurance--- should be government or insurance- centered. i fought with insurance administrators, i fought with government bureaucrats. when you are fighting with insurance companies, you can appeal. when you are fighting with the government, you cannot. the people that rejected the most claims on a percentage basis is washington, medicare. anybody that stands between a doctor and a patient gets in the way of a sacred trust, relationship. host: next question is from keith in palm bay, florida. caller: we are having a good

debate about this but we seem to be at a standstill. it would be nice if the supreme court would say if this is even legal about mandating people having insurance. since the bill did not go through last year, the taxes that will not be implemented until 2015, but if it is such an emergency, we are going to pay the taxes first. i just had a $70,000 surgery. medicare only paid the hospital $9,000, the doctors about $3,000. from what i understand, medicare pays a portion of the cost of the surgery's. isn't part of the problem that

medicare does that and interest only pays 50%, but if someone pays cash, they pay the total bill? they pay the full bill, and then it is broken down three ways for people with medicare. there are a lot of things wrong with the system. city ordinances are 10 paragraphs long and they have unforeseen consequences. this is a 2700-page bill. how many unforeseen consequences are in that? guest: there were five questions there, and i would love to go into each one of them. you talked about the mandate, government-forced insurance. there are constitutional issues. i was talking to orrin hatch about that this morning. he believes, as i do, that this

is unconstitutional, to mandate that everyone in the country purchase a product i think you are right. you also asked about the gimmicks. i think this bill is loaded with them. for 10 years, they are going to continue with tax cuts, -- i am sorry, tax increases, medicare cuts. they are going to do this for 10 years to only pay for services in the last six years. those are the kinds of gimmicks that they used to say that it will only cost $1 trillion. however, if this is fully operational, it will be much more expensive. you also mentioned this surgery in florida where medicare paid very little in comparison to the cost of the operation. that is the reason that the mayo clinic have said that we do not want to see these medicare patients anymore. we lost $800 million on medicare

last year. that is why the mayo clinic in many places it is saying, do not send us any more medicare patients. you also mentioned the unintended consequences. we have 2700 pages of a bill with over 160 government boards, agencies, and a lot of places it says the secretary of health and human services will make a decision. i think that is rife with unintended consequences. finally, the president has not named a director for medicare. he has been in office 13 months. they have not sent inning to capitol hill for an administrator to run the medicare program. why? is it because they do not want to put someone up there who have to answer these questions about what the plan is, or the

implication of cutting $500 billion from the seniors who depend on medicare? the bottom line is we should have for this country someone confirmed by the senate to be the director of medicare, and they need to be nominated by the white house. they have not given us a name for medicare director. host: the question of universal involvement. the social security system has been around. we do not have the option of opting out. we are required to take part in it as part of retirement security. what is the difference? guest: i am not a constitutional lawyer, but i am an orthopedic surgeon. there was never a time when the government said, you must purchase the product. i think there are some significant differences, and that is the issue of the 10th amendment.

21 states, i think, are working on legislation to say that we do not want anything to do with this. host: next phone call from texas. caller: i come from a large family. i am over 60. every time i go to a doctor, they want me to take a bone density test. i feel like it is a waste of money for doctors to be pushing this all the time. i feel like there is a lot that needs to be taken out of there. i have a friend who was paralyzed for 10 years, and i helped her. she he did not have a doctor's prescription, so she had to call

a doctor. the doctor came to her house to give her a prescription to get her toenails done. i think is silly for that to be necessary. guest: there is a lot of waste in the system, and it is because of the rules and mandates. you said you are over 60. we worry about osteoporosis. as someone who has taken care of hundreds of people with broken hips, broken wrists because of osteoporosis, there is a real effort to get people lessen the risk of osteoporosis from fractures. people are living longer, healthier lives, so anything we can do to prevent osteoporosis early on and prevent a fracture can help you individually as well as save money to the health care system.

the x-ray that you are talking about is one that medicare only recently added as something that they would pay for. they will only pay it every couple of years prepared some people need them more frequently. women want to be evaluated, particularly those with high risk, to see if exercise, diet can further's to process changes. host: berlin and -- burlington, vermont. scott. caller: thank you for taking my call. i like the point that the host made about social security. you did a nice job of sliding away from the answer. we spend more per capita than any other industrialized country on health care and we

consistently rank much lower than most of those countries. most of them have some kind of mix of single payer, private- public. what makes you think that we are so smart, that all of this profit money going out of the system can be used better in the system, rather than paying the shareholders and ceo's? republican did not have a problem pushing through bush tax cuts. everyone is talking about reconciliation now. they are screaming fire in a crowded theater. i admit, i am not a big fan of his mandate, but we have to do something. you seem to be more happy to let the world burned and then do anything about it. and i'm disappointed with all of you, really. guest: a couple of things. you asked about the

constitutionality of this mandate, social security. that is not for me to decide. it may come out in a supreme court challenge the number of states that are saying you cannot mandate us. that is different from what congress is voting on. the issue, about, we rate lower than other countries in terms of health care, it depends on what you look at. in terms of coverage, in canada, they do much better. however, 30,000 canadians came to the united states last year for procedures because the system ran out of money. usually, around october, they say, we are not going to do any cataracts, we are not going to do any joint replacements. if you are hurt, maybe you can get it done next year.

i have taken care of people from canada who come to the united states for care. i did not accept all of them, but the premier of newfoundland came to the united states to get work done on his heart. when she had procedures to be done for cancer, she came to the united states. she knew that survivor right after cancer treatments are much higher in the united states because delays are less. you also talked about some of the company's out there, as pointed out by the president that i attended, if you took all the profits of all the insurance companies in america, that would cover the entire country for two days. so you are right. we might need to pay attention to those other 300 to 24 days.

-- 364 days. if we could purchase insurance across state lines, people would have more choice to choose what is better for them. if they are buying their insurance individually, give them the same tax breaks that the company's debt. we also need to believe on person -- also need to improve personal responsibility, wellness. half of the money we spend in the country is just on 5% of the people. they tend to be the people that he too much, exercise too little, and smoke, and they are the ones that get the chronic diseases. heart disease, diabetes, cancer. these are the problems that we see in these people. we can focus our efforts on health coaches on this 5%. that might do a lot to say

money. those are some of the things that we need to do. finally, the issue of how it goes through the system. finally the president, when he said he was a member of the senate, that this was a hijacking of the system. host: we are going to leave it there. what will your life be like between now and the day of the vote? guest: i will continue to talk about the things that are right in our healthcare system. we have the best system in the world but i am going to encourage everyone to get involved. call your member of congress. if you are for this, if you are against this, let them know. overwhelmingly, i think, the american people have said we need to start over. only 25% of people want to pass

this bill. get involved and that your opinion be heard. thank you. host: we are taking a short break, and then we will continue the conversation. our next guest will be represented peter welch. -- representative peter welch.

>> the head of citigroup testified before the federal oversight panel on federal aid the company received under the t.a.r.p. program. that begins at 10:00 eastern. this afternoon, a look at the 2011 budget for the transportation security administration. the acting administrator will testify at 2:00 eastern. >> the next journalism must be one open to blogs and e-mails that are hammering like this on the door, hoping to add new information, raise new questions, to just new context.

>> winners of this year's national press foundation award talk about the changing society in journalism. >> t.r. reed has traveled all over the world. his books are about his troubles and contemporary world issues. join our three-hour conversation with him, and your phone calls. live sunday at noon eastern. host: peter welch is the representative that large in vermont. this is his first visit to "washington journal." happy to see you. we are talking health care. we just turned bart stupak say that he and 11 other democrats

who were part of the coalition concerned about abortion language will not vote for the bill if it continues to contain that language. what kind of challenge the as speaker nancy pelosi have in getting this passed? guest: the political challenges are immense, but she had determined to proceed, and it is time to call the question. we have to make the decision as a country when the we are going to move to a system where all of us are covered, all of us help pay, and we tried to transform the delivery of health care from the volume-she-based service, to more of an outcome-based service. host: in the future, how might this system be structured? guest: if we pass this legislation, it is not that we are going to overnight

transforming healthcare system. people will still be able to go to their hospitals and doctors. what this will do is say, all americans have to be in a health care system. you cannot be successful in health care unless everyone is covered. then you begin making these system changes that many of our hospitals and doctors have been asking for. simplicity in the billing system, were born and hospitals that manage chronic care, things that are expensive and health care. if we pass this legislation, i think you will see the beginnings of the capacity, through incentives that make sense, to have a much better health care system. a big problem right now, among other things, there are over 45 million who are not covered. two, it is 70% of our economy. it is a huge economic burden on

our businesses, middle-class families. the dynamic in the current system is led by insurance companies. their goal is to return profits to their shareholders. what the results and is avoiding risk. if you are healthy, they want to ensure you. if you have a pre-existing condition, they do not. they have this cost shifting dynamics that is not sustainable. we passed this health care system, we do we pass the system, i think we begin to change the dynamic. host: here are some comments that were made last week about the overall cost. they talk about the announcement from cbo, how the bill does not report the real cost. basically, it will break the bank. guest: i disagree with that.

the referee that we have to look to is the cbo, and they scored the house bill, and and said that it would reduce the deficit by $100 billion in the next 10 years. there is a lot that we could do better, but if we do not take this first step, it will be the status quo. take a look at what happened in california. bluecross asked for a 40% rate increase. think about what that does to a small business, middle-class family. either they don't coverage or they get inadequate coverage that is the status quo, and it does not work. host: our viewers are ready for you. spend a moment to talk about your separate legislation on coverings prescript -- prescription drug medications for medicare. guest: we want to allow the

government to negotiate wholesale price discounts when we are making bulk purchases. it is a pretty astonishing thing in medicare that we buy wholesale but pay retail. if we pass this legislation and negotiate prices, just as you would in the pharmacy, we want a taxpayer to be able to pay less. it would save the american taxpayer $156 billion over 10 years. it makes no sense to abide by a time delay effort -- tom delay effort which dictated what people would pay to the insurance companies. this would give people more access to what they need. host: do you support drug importation from canada? guest: yes, drugs are

lifesaving. if you have competition, the government, when it is purchasing, can negotiate prices, or they can compete, as long as they are safe. that will drive down prices and give the consumer some relief. host: peter welch serves on the house energy committee. steve, republican. caller: this was originally for senator barrasso, but it applies for all the american people. i have been involved with medicare in 30 years. i am a broker for medicare supplements. some-20 years ago the industry was in complete shambles. congress created a set of standards for medicare

supplements, and basically, they designed x-number of plans, starting with 10, and mandated to all the insurance companies in the country, that if you are to sell medicare supplements, you must sell these certain plans. you did not have to sell them all, but you have to sell one of them, plan a. suppose the congress was to create a health care plan in the country that provided all the things that democrats and republicans could agree upon, such as portability, pre- existing conditions eliminated, no caps on lifetime or yearly, and mandate to the company's you can continue to sell the products you sell now, but you must also sell these programs. here is nothing.

in the state of maryland you have bluecross blueshield which is a non-profit, and you also have for-profit companies. there are 26 companies to choose from. if he would allow this to go nationwide and everyone had to sell the same plan, the consumer could look up and say, if all the plans are identical in coverage, in benefits, the main thing will be the price. host: i'm going to jump in because we understand your thought. guest: under the president's bill, there would be the ability to sell across state lines. you want to give the consumer choice, but you also want to give them protection. if you have been established a base level of benefits, so that when you are purchasing a policy

and from new jersey, vermont, california, you have the confidence that you can get benefits when you need them. then selling across state lines makes sense. you could have several options, but they would all have legitimate health care coverage. that competition you are talking about can occur under the bill we are considering in congress. frankly, i think it gives the consumer more choice and giving insurance companies more competition is a good thing. host: fort ann, new york. democrat line. where is that? caller: it is close to albany. it is a beautiful place. congressman, i am very much in support of the public option. i have a minor thing to talk

about that i have not heard anyone mention. republican's genius on distilling the message down to sound bites and the democrat's inability to coalesce its message. we heard of up cut and run, and most recently we heard that this was not a summit, but they set up. however, the democrats cannot distill their message into our sound bite world and get the message across? it is due this war and die. i have not had insurance for 10 years. i am about as unhealthy as a person can be, but i cannot afford to go to the doctor. unless republicans jump in here. i am 63 and i have two jobs now.

. . the challenges. health care is such an important and intimate issue for

everybody. the health-care industry, as it develops with jobs and our communities, hospitals, providers, and how intimate it is an interconnected in the economy means any time you propose any kind of change, people step back and ask how will it affect me tomorrow. fair question. all fair questions. it means that if there is going to be exaggeration, playing on people's fears, asserting that there are things like that panels when they did not exist, there will be an audience that will be receptive. there is a challenge for us democrats and republicans who want to have a better health care system. but we have to, in my view, keep forging ahead. when president johnson passed medicare in 1964, a lot of the arguments against doing it were very much the same as the arguments doing -- against doing what president obama is

proposing. within six months of that passing, americans saw that this works. i have access to a doctor. i could go to a hospital that i want. this is easy for me to have some deduction from my check to help pay for it. i think we can get to that point if we pass this bill. and then the rhetoric tends to evaporate and the reality will set in. host: peter welch is a graduate of holy cross college and university of california berkeley. he is a lawyer. founded a law firm. he served in the vermont state senate and also worked as a public defender earlier in the career and his committee assignments besides energy and commerce, oversight and government reform and standards for official conduct which is the name of the ethics committee. i must ask you about congressman rangel's decision yesterday. guest: he made, i think, at the right decision and obviously a very hard decision for them.

that was in the wake of the admonishment from the ethics committee. i can't speak of any of the deliberations of the ethics committee but obviously that was a very consequential decision. he gave an address to the caucus and he was gracious. but he saw that the focus on him would get in the way of moving ahead on things he really cared about, including health care. host: connected the two, this suggestion in "the financial times" that his departure and john murtha's death complicates things. the you agree? -- do you agree? guest: i actually don't agree. it is complicated enough -- the issues, the politics are very difficult because if you push on one place it pops out and the other. and there are members in districts where it there is a close call. but i think each of us knows that in the end, we have to change the health care system that we have. it is not working.

and americans know that. this is the question, do we want to stick with the status quo, which is essentially the option that is being offered to us by the opponents. or do we want to take the first step? one of the things that is unfortunate is we are not doing this on a bipartisan basis. when we did a major health care bill in vermont, we did it together. we had a republican governor and a democratic legislature. we knew we needed to work together, not just to get it done but to get people confidence -- give people confidence we were getting more right than wrong and what we got wrong we would be willing to come back and make right. we are denying america that confidence when we can't do it together. but i do believe the president has reached out as often as he can and even most recently this week, when he made concessions on a number of concerns that were advocated by republicans. so maybe we can still get there together.

host: of this twitter comment -- guest: if he is absolutely right. actually, that is one of the dilemmas and the coke is we have in reforming health care. as he i am sure knows and many viewers know, our employer based system started in world war ii. what is going on is there were wage price controls, employers could not offer wages to keep employees so they came up with the benefit of health care and that helped uncover some good employees to stay with that company. then it locked itself in and it became the basis upon which we expand the health care. in contrast to european countries where it tended to be done legislatively so it was not union by union, it affected all of the citizens. but it is a real obstacle to making the transition we need to make its move. host: the next call is raleigh, north carolina.

wayne, independence. caller: good morning. it is a pleasure. it is so hard to get through and it is a pleasure to be able to talk about this very dynamic issue. i have kind of a unique perspective, i think. i am a disabled health care professional. i have been disabled for almost 10 years. i am in my 50s now. i am a surgical technologist and having to live in this medicare system is a nightmare. i'm going through the intestinal problems right now and one doctor keeps sending me to another doctor, to another doctor, to another doctor. just to let you know, as a democrat who voted for bill clinton and worked on his election team from the year, where we are originally from, i am just really disappointed at the climate, even from the administration. i just wonder if anyone really knows what we go through.

my wife fortunately is very healthy. she is a healthy person. and people keep saying, it is better to do something than to do nothing. i taught my children that when there is a mess going on, sometimes the best thing to do is to step back, kind of clear the table and maybe even to start over. i just don't understand -- one question i did want to ask is, as your health plan as you have as a representative, do you have a choice whether to take it or not to take it? when you came into office? and why do you think that -- like, for my wife, why would she -- be penalized for it? i wonder if you really know -- as a former democrat and now an independent, just the disappointment that is out

there in the united states. there is a lot more than i think you know. i really appreciate your comments. none of us know what you go through. one of the things that is so profound about our health is when it is compromised, it is only then that we realize how incredibly challenging that is. it and i think when you walk that journey -- there is a lot of that that only you truly understand. and i hope i have some empathy for that and respect for that. but i can't say that i can fully understand what you are going through. would you describe, by the way, it sounds like many of the challenges you face are getting bounced around from expert to expert and doctor to doctor. that is the way the health care system is organized. i talk to all kinds of people who are very frustrated. i think in many ways we have gotten into a health care system

that intensifies specialization rather than primary-care and ongoing care. i know when i talk to folks who do go to the hospital, they did not know who is in charge of their care. it is very frustrating. and actually accidents happen and outcomes are not as good as they need to be. i think it has a lot less to do with the way we pay for care -- although the fee-for-service volume based medicine certainly contributes to it -- then how we organize care. one of the major things we have in this bill comes out of work done at dartmouth right next to vermont. it is about trying to focus on accountable care organizations, is the term. basically it means having doctors get paid and health providers get paid on the basis of treating the whole person and not just doing the volume-based fee-for-service series of procedures. so, i hear you. and i hope and pray that you are going to get better care in the

future. host: on the congressional health care plan, we get some and questions. you have a number of options available to you when you become a member of congress? guest: we do. as a member of congress, you are a federal and leave. and we have a choice of plans that we can purchase. -- we are a federal employee. you can choose among a series of plans you can be enrolled in. that is the same of any other person who works in the post office or works for treasury or customs. many people have asked whether we in congress would accept the public option if we had a public option, which is not in a bill now, but i said, sure, i would be glad to do that. i think you as a citizen would have the opportunity -- should have the opportunity to make a choice. what we need as well as consumer

protection, so when you pay good money for a plan did a real benefit. what the problem could be -- aetna, we had testimony about and the aetna plan where a man was paying on a high deductible plan. we thought it it would cover hospitalization -- he had a heart attack, went into the hospital and he thought, thank goodness i have the insurance. the insurance only covered the cost of this hospital room, not the dr. lee and the surgery and a surgical suite. that is astonishing and not right. that is the kind of rip-off thing the insurance companies are doing to focus on the profit side rather than the product of benefits for the consumer. host: next up is palm city, florida. jay on the republican minority caller: how are you? i'm calling to ask a question that nobody seems to answer. if i'm on disability. i am one of medicare. the gimmicks to people are doing

-- how much will it cost for taxes for 10 years to pay out 10 years? because i don't blame that your price range is in the area of what it is going to save -- getting tan but paying out six? guest: number one, you are and medicare. whatever complaints, thank goodness for medicare because that is providing health-care coverage for you. of course, as you know, that is paid for by you and all of us. when you become 65 and eligible, things are taken care of. secondly, we argue back and forth. i listened to senator barraso and you can listen to me. and the bottom line is we have to listen to the cbo, congressional budget office, which is the referee of what the total cost of the plan is. over the 10-year period, the cbo

was saying this is going to help reduce, and not increase the deficit. week cannot live with insurance companies being in charge driving this, when they are going to come in with a 40% rate increase. think about how the current system is operating. the medical care cost increase to, three, four times the rate of inflation, profit growth and the rate of wage growth. that is simply not sustainable. host: of this question 3 twitter -- -- this question via twitter -- guest: that is part of it. and much of this legislation will reformed insurance. the way we will reform insurance is you have to make insurance companies compete on a level playing field. the way they compete now is they try -- tried to insure you when you are young and healthy and want to avoid you if you have a "pre-existing condition clause "

and likely to get sick. that is simply not sustainable. who among us will not add some of the be sick? we know all of us will have to be covered. in a way it is like car insurance. we get insurance not because we are sick now or we are going to have an ax and tomorrow but because of the possibility and likelihood and you spread the risk. and the more of our citizens that are covered, the more that we spread that risk. incidently, the more you reduce that cost shift. when you buy your health insurance, about $1,100 of the family premium is to pay for uncompensated care that is provided by your local hospital, your local doctor, to one of your neighbors who shows up in the emergency room but has no coverage. host: the next call, alexandria, louisiana, democrats line. guest: thank you very much. caller: job and, you may want to write this down.

jiggled gen amend -- non if the republicans took their own bill they would vote against it because they don't want the president to succeed. as a democrat -- as a whole the american book of like it because they don't understand but if you break it down into part, they like it. it may take four years to kick in, but off the top what happens when it passes the pre-existing conditions will take effect right away. children will be able to get covered up to 2627 and it will cover the donut hole and medicaid. everyone wants change in health care. another comment i want to make -- the representative before you said obama -- why do that when his colleague from alabama will hold up all of his appointees.

i did not remember his name. and stupak is just a week democrat who comes up with the abortion language because he does not want to bring a tough vote. bring in the social issues. host: markets, what is your question? -- marcus. caller: a couple of days ago i heard a congressman was voting against it because of abortion. i was told it is not true, he changed his mind. is he on the list? guest: i don't know. i would check out. he is the only republican who voted for it in the house. it you did a pretty good recitation. we have to give you a woman from ford and if the message out. host: do you agree the democrats are not effectively communicating health care? guest: there is no question. you can blame us on "mexican --

"messaging." it is difficult and subject to demagoguery when the opponents -- opponents categorize it as debt panels when it is false or that it will take away medicare when that is flat out false. it evokes fears. people should be concerned about what is happening to their health care. so, if you have demagoguing going on, then it gets in the way of having real debate about the issues. i think there has been an enormous amount of mixed -- mischaracterization beard the other thing, you have the filibuster rule in the senate and it is very disruptive. if you have a single senator who can hold up -- hold of unemployment benefits for a single senator who can hold up consideration of the major question that america has to face. the great country has the confidence to face the challenges, whether it is energy or health care. and the senate should be willing to vote yes or no, upper down,

on the health care bill and then let the american people decide whether they approve or disapprove. that is what the election is about. i favor us making a decision and not having the senate filibuster rules be an excuse to avoid accountability to the american people. host: the last question is from kokomo, indiana. a bill on the independent line. caller: how are you folks this morning? i am kind of nervous, so bear with me. i want to challenge this doctor who was on previously because i have seen him on several times and he has made a lot of misquotes. i'm looking at my preventative services right now -- it says you are eligible for the following preventive services -- prostate, psa, diabetics, cardiovascular and aneurysm.

i think he said that medicare would not pay for your psa, so i think the guy is sitting. the other thing i would like the javelin to explain the the american people, they keep saying they will cut $500 billion in medicare but if i interpret correctly they will take away the advantage plan that was put in by the republican so the insurance companies can make a few bucks on medicare. so if they eliminate the advantage plan, the insurance companies will no longer be running medicare. you get the same services -- you pay the insurance companies to run it. host: you did not sound a bit nervous. guest: you did not sound mervis and you made sense. you got it right. the legislation will strengthen medicare.

more preventive services will be covered with no copiague or deductible. secondly, it will eliminate the doughnut hole. when it to prescription drugs -- people cut back of the medication we need. we will take away the giveaway rip-off to the insurance companies who are charging more but not doing more. so, i appreciated your comments and i agree with susan. host: use survive their first c- span call-in and experience. and -- you survived your first c-span call-in experience. we will be talking about learning more about provisions within the federal budget -- support system to the unemployed and people living below the poverty line to understand how your money is being spent. we will be right back. >> the latest headlines from c- span radio the labor department

reports that new claims for jobless benefits fell last week to a level economists had expected. meanwhile, the number of people continuing to claim benefits fell more than expected. productivity grew at a faster pace than previously thought in the final three months of last year and labor costs fell more than initially estimated. the associated press says the combination of rising productivity and falling lacoste's boost company profits and helps keep inflation at bay. citigroup ceo vikram pandit will find the government and taxpayers this morning for the banks $45 billion bailout. it he will also stress the need for a strong consumer authority as part of the regulatory system. his prepared testimony just released comes ahead of this morning's congressional oversight panel hearings, chaired by harvard law professor elizabeth warren. live coverage at 10:00 a.m. eastern time on c-span radio or c-span3.

a court in germany convicted four men and a foiled plot to attack u.s. targets in germany. the men were charged with plotting bombing attacks in germany against american citizens and facilities, including the u.s. air force ramstein base. they have been sentenced to up to 12 years. yemen's interior ministry said it arrested 11 suspected al qaeda notes and during a raise -- raid on one of their homes. the u.s. has become increasingly worried about militants based in yemen's sense al qaeda groups there and saudi arabia emerged. they organized the failed attempt to blow up the u.s. airliner on christmas day in detroit. those are the latest headlines from c-span radio. >> this morning, the head of citigroup testifies before the congressional oversight panel on federal financial aid the company received under the tarp program. that is live beginning at 10:00

a.m. eastern on c-span3. this afternoon the look at fiscal year 2011 budget for the transportation security administration. the acting administrator will testify. live at 2:00 p.m. eastern also on c-span3. >> the net journalism must be one open to blogs and e-mail that are hammering like this on the door to be let into the conversation to add new information, to raise new questions, to suggest new context. >> winners of this year's national press foundation awards talk about the role of journalism in a changing society, saturday night at 8:00 a.m. eastern on c-span. >> as washington post international correspondents, t.r reid has traveled the world, and his books are not just on his travels but views on global issues, including "the united states of europe.

could join our three-hour conversation with him and your phone calls live sunday at noon eastern on book tv's "in-depth" on c-span2. >> "washington journal" continues. host: our final guest is ron haskins, economic studies senior fellow at the brookings institution. we will be talking about programs within the federal budget that our aid to middle- class and also people who might be living below the poverty line, how the need has changed and federal budget and congress has responded. to tell you about our guest and what brings to it, he spent in number of years at the house ways and means committee on capitol hill as staff director when the welfare law was written and was part of the human resources subcommittee. he also was a senior advisor to the president for welfare policy from february through december 2002. phd in developmental psychology

and also was nco in the u.s. marine corps. he brings all that to the discussion. thanks for being here. guest: glad to be here. >host: let us talk about what has been in the use because -- in the news because of senator bunning's hold, unemployment benefits program. how has the financial recession change in the demand level? guest: huge. they are all out -- at their all-time high. we could spend as much as $150 billion and in a typical year we would spend 20 million -- 20 billion or $50 billion. the program is in tiers -- fundamental, everyone has a right to 26 weeks if they need qualifications and sometimes an extended benefits program if unemployment reaches a high level in certain states.

people could get up to 90 weeks of benefits, and we will spend $150 billion. one of the worst consequences is the states have to pay the benefits, the basic benefits and part of the extended benefits. and they have an account that the federal government keeps. it is based on state taxes, so states pay money to the federal government and put it in an account and supposedly save it for the state. these states accounts are devastated. more than $30 billion in debt. it is predicted they will go to $90 billion in debt and that is all money the states have to pay back in the states are already in worse financial. the impact of unemployment on the whole system has been gargantuan. host: why are the state accounts in such bad shape? guest: we are paying such high benefits. host: but the people working to pay taxes -- guest: and that is as well. and almost every state -- already 30 states are raising

their taxes for 2010, which is a no-no during the recession, but they have to because they are belly up in the trust accounts that they have to pay back. yes, increased taxation -- in fact, it is a principle of government if you spend a dollar, eventually at some point there has to be a dollar worth of revenue. we are violating that now because of the deficit but in the long run we have to live up to it. >host: what is cobra? guest: policy put in place many years ago that allows people to keep their coverage if they lose their employment, so they still have to pay but they can keep their coverage. that was a very important policy, a very good policy. that has been extended as well. host: are there any federal dollars to support it? guest: i am not sure exactly how it is financed. it is primarily financed by individuals paying for their insurance. you get to keep the policy, but you have to pay both your share and the employer share.

mostly health insurance is paid for, most of the insurance, other than medicare and medicaid, is paid both by employee and employer. and obviously once you are laid off the employer no longer pays a share so primarily they come from employer and employee, so when the employees of it is just a ploy he. host: we are talking about federal programs supported by your tax dollars that provide either temporary or long term assistance to people in need and how they might have changed as a result of the recession. the phone lines will be on the screen. you're welcome to call-in entellus about your experience. the job is to give the basic primer. i have a chart that gives you a big overview. let me put them on the screen so people can be familiar with some of the areas we're talking about. first, a program we all call food stamps but the acronym for

the federal government is snap. guest: they changed it because the food stamps had negative publicity. host: that will help a lot. guest: a big difference. host: $57.2 billion. a unemployment insurance, $49 billion. supplemental nutrition program for women, infants, children, $7.6 billion. heating and energy assistance, 3.3, tempore assistance for needy families, $2.5 billion, homeless assistance programs, $2.1 billion. i will stop right there because there is a lot of detail. let us start with food stamps. again, how has the demand changed? guest: demand for food stamps has exploded just like demand for unemployment insurance. host: who qualifies? guest: roughly speaking, people who are poor. you can get food stamps something on the order of 22 for

$23,000 of income. most people on cash welfare -- temperate assistance for needy families, eligible for food stamps. but a lot of other people. the elderly, kids. food stamps is in effect a guaranteed annual income. everyone is qualified if they meet in, and resource requirements and they could get several hundred dollars a month. i think $100 per person per month. there are restrictions. it is food. you can buy cigarettes, wine, liquor. you can't buy hot foods and you cannot eat out. only four food in the grocery store. host: has congress responded by increasing the dollars allocated? guest: they have to. the way it works, the congressional budget office at the beginning of the year estimate how many will be eligible for the program, so in times like these, the estimate big numbers. they missed it the first year because nobody realized unemployment would go so high. but congress has the appropriate

more money. this is called entitlement programs, it and if congress does not appropriate money people still eligible so congress has to make up later. others are not entitlements. if the money is out -- almost all of the housing programs are like that. in food stamps, if you are eligible you get the benefit. host: 1 administrative change, anyone on them or in grocery line -- they use debit cards. guest: that is a fairly old policy. there was major legislation in 1996 that advanced that policy and it was quickly implemented after that and i think every state now uses the debit card. i think the general feeling is when it was passed -- they had done experiments in several states -- it worked well. it reduced fraud. i would say on the whole it has been very good. host: also administrative cost, not mailing vouchers. guest: it should.

most of you talk about the change in the name because of a stigma that might have been attached. debit cards, everybody uses the cards. is that another byproduct? guest: you don't have to flash out the food coupons. there are people who recognize the debit card -- it does not completely eliminate the stigma but it is a step in that direction. host: let us do the cash program -- guest: used to be guaranteed income. now it has a strong requirement. an amazing results. there used to be 5.2 million families on the temporary assistance for needy families program and now there are less than two and 80% of those mothers went to work. over 90% mothers on the program. host: is this what we called

welfare? docca it is still called welfare. but in 1996 -- guest: it is still called welfare. the cash payment has gone down. it has been controversial in recent years because unlike food stamps and unemployment and medicaid, those programs that responded when the recession came they increased. but it did not for long time. it is not clear exactly why. but many people pointed out, republicans and democrats, that a safety net program should increase during a recession, it stands to reason. it is increasing a little bit now but nothing like food stamps and unemployment insurance. so the probably needs to be some changes in the program because people need cash during a recession just like unemployment insurance, which is also cast. some people who run up and and -- run out of unemployment qualify. but i would point out, this is

the only federal program that really has a strong work requirement and it is observed, the states enforce it and it has made a tremendous difference. host: the spending on welfare is how much? guest: it depends -- yes, it is 16.5 billion federal dollars and then a little bit less state dollars. this program is financed both by the state and federal government said the total is 29 billion, to $39 billion. that does not increase during the recession. host: of the combination of welfare and food stamps, most on both. $80 billion annually in federal spending. guest: a little bit more. host: the last question is about -- being told my mic is falling off. let me fix this. you talk about waste and abuse and the program. for people who are watching this and concerned about their dollars been well spent, how effected is the federal

government in ferreting out fraud? guest: in welfare programs i think the federal government does a fairly good jobs. there are strong requirements. you always have a trade off of really giving benefits for those who need it and have a tight program that refuses benefits to people who miss some qualifications. i would say on a whole, on a 10- point scale, on welfare, seven. food stamps -- in the old days, i would get eight or nine, but it has become so tight so the back of a little bit. i would say on a whole, waste and abuse -- the federal government and the states do an excellent job. host: a primer on how the social programs work. austin, texas, ardell is on the democrats' line b caller: thank you. my question -- hello?

i'm self-employed and have been self employed for the last 14 years. self-employed a mover. the most money i grossed one year is probably $25,000. yet i pay taxes every year. i have never gone a year where i have not had to pay taxes. i report my money honestly. i have never been eligible for unemployment. i make too much money to get food stamps. it is very hard for me to believe in any of these policies because they cannot apply to the self-employed, it seems to me. and the reason i am self employed because of a felony i got probably 15 years ago, never in trouble since. but because i have a felony conviction it is hard for me to be hired in the regular market, so i work for myself. what is being done to help other

people -- some people are self employed -- what is being done to help us to be able to get these things that everybody else qualifies for? for the last two years i lost at least 90% of my business because of the way the economy is, but i can't get any assistance. i never hear you say anything about the self-employed. host: on eligibility and the self employed. guest: i congratulate you for starting your own business especially given the disadvantage is you have. i think that is a wonderful thing and i congratulate you for paying its taxes. if you lost 90% of your business and your former income was 25,000 you are definitely eligible for food stamps. everybody in the country who has low income and low resources -- you might have to much property, a car, house, what ever, that would keep you from getting the benefit. but i think you'd need to check

into that. you are eligible for food stamps. the concept of welfare is that people who do not have many resources and did not have much income, are eligible for these programs. some of the programs -- but the cash -- like the cash program, as strong work we -- work requirements because americans do not like to give work -- and my way. you could qualify as long as you meet income and resource standards, you would be eligible for the benefits. host: question by twitter -- guest: the states with the most population -- california, new york, florida, texas. some have low benefits, especially florida. a this is a long, complicated story. in some of the programs they get less money than they should based on their population, because that is because of the old days they had low benefits. those to get the most unemployment insurance, they get

the most in food stamps, they get the most in medicaid. the biggest states. roughly speaking it is proportional to population. roh host: is following up on the changes -- guest: i would think the honest answer there are moderately good day care programs. there are some excellent programs. but roche -- most research says 70% are mediocre and maybe 15 percent are bad. the federal government more than doubled the amount of money for day care. there is still not enough to go around. this program is capped. even though congress doubled the amount of money and increased it a lot more sense than and even though we had $7 billion -- there is still not enough to go around. president obama has already increased daycare twice now and

it is in the budget now. there will be even more. but families still have to pay some of the money runs out. it may not be fair but that is the way the system works. host: michigan, independent line. caller: i've got kind of a comment and maybe more requests and, i will try to make it brief. i am retired. i work two part-time jobs because i cannot find a full time. as everybody knows or should know, michigan is in a real economic depression at best. i guess my comment is, i hope that people in washington are paying attention to those of us out here who really got hit hardest. i say that because everybody knows it is the lower and middle class who pays most of the taxes when you look at it on the scale. the higher up, they are able to find ways to get out of taxes.

we need some help out there. i have never had issues in my life and now i'm looking at i'm the only one bringing money in and i'm bringing in every time it checked that looks like every few months i am paying more and more out of my retirement check for health care, whatever. taxes and the states, as mr. haskins says, states are looking to increase taxes. it is hard to pay taxes if you don't have the job or money coming in to do it. it makes it kind of rough. host: a question for you. if you are working two part-time jobs, as you transition into this sort of work, have you applied for any federal or state assistance programs at all? caller: no, i have not. host: have you given it consideration? caller: i have not heard there has been anything available. so far i have been kind of holding my own because i did not know where it is going because my wife's unemployment has been

cut. she has been collecting for just a hair over a year and all of a sudden even though the benefit was supposed to be there, it is not there anymore. guest: i would check back on the unemployment because congress just passed another extension, and if she had a year of unemployment, michigan has some of the highest unemployment in the country and that triggers these extra tears of benefits. she may qualify. it sounds to me from what you said you probably qualify for food stamps. but let me say a word about taxes. taxes are always so confusing because we just say tax but they're all different kinds. there are lots of federal taxes for roughly speaking, two kinds. income taxes, which are inversely proportional to your income, and social security taxes, which you paid from the first hour, which are very different. individual income tax is extremely fair, extremely graduated, upper income people

-- they may be able to achieve here and there but they paid the overwhelming majority of federal taxes, people who make over $150,000. people who make a lower amount of money, especially people under say 30, 35, 40 and change, they pay no taxes. and indeed, the mothers who left welfare, they actually pay negative taxes. the federal government sends them a check, earned income tax credit. that is primarily for families with children. it sounds like you would not qualify. but i think your taxes are primarily social security taxes and state taxes and not federal income taxes. many americans do not understand we have an extremely fair individual income tax system. host: we have a debate on twitter about the cost of all of the programs and deficit spending and increase in the federal debt -- this person says, how will we

pay all of the debt back? guest: funded out of deficit spending. i am at brookings institution but for seven years we have a project -- we published books and articles and we even toward the country, been to something like 60 cities, trying to tell the nation we got to start paying our bills. this deficit financing is a very bad. and it has been a bid conflict in washington about the stimulus package. almost everybody thinks we should spend more in a recession but we do have to pay it back so we ought to make some kind of commitment and actually initiate starting paying back some of the money like the states are having to do with unemployment insurance. so whoever wrote that is exactly right. this is a huge problem and it will haunt us until we do something about it. host: rolling rock, north carolina. steve on the republican line. caller: ever since i was 15 i have been paying income tax and

now i was 68, i got my hand out to get social security that -- back. they cut the 3% increase last year. i understand they will do it this year. taxes have gone up. milk has gone up. i'm taking so much less home. i am wondering, if you want the seniors to be in that line, too, collecting benefits? i can't understand why -- who in the white house, underneath the white house of ruth, doesn't get a raise every year? that is really my question. guest: of the way social security works, there is an automatic cost-of-living adjustment every year. last year -- you said 3%, that is roughly what it is most years. last year, though, there was actually a decline in average incomes of the cost of living did not go up. but nonetheless, the president

decided and the democrats decided to send a check to people anyway so people who previously got a cost of living, so called:, got a flat payment -- i think it was $250. so people on social security are protected from inflation because they get the annual cost-of- living adjustment. social security payments are usually not enough for people to live on certainly compared to the way they lived before they retired but it does increase every year. host: waldorf, maryland. thomas on the democrats' line. caller: this is directed basically -- senator barraso was on earlier regarding health care. he is a prime example of the republican platform. if you say something long enough people will start to believe it. the president answered his question about the money for people who are -- who have

health care as catastrophic care. the president told him if he was making $40,000 a year, how much money would he have to put in the health savings account and he answered that in the american people heard what the president said and his answer. he did not have an answer but he came back with the foolishness about health savings accounts is only good for people who make decent amounts of money. i would just like someone to bring this to the attention time he is on tv. this question was answered so why do you keep bringing back up the same foolishness? host: thomas, thanks. that leads me to ask you about qualifications for federal programs. this week we began to hear a discussion about a new formula being proposed to look at the definitions of poverty. " the washington post" story yesterday --

guest: this is an enormously complex discussion. let me be very simple about this. first of all, to have a poverty definition you have to define a line and say people below this line are poor and then measure of their income to see if they are above or below the line. everybody agrees on that. our line was established in the early 1960's and it was roughly three times the cost of a basic food package. because the american -- every american at that time spent one- third on food. now it is less than 10%. so much has changed. our whole approach to poverty is flawed. so many years ago the national academy of sciences recommended a new way, that took into account a lot more factors. and we really have been at loggerheads. 15 years now, we have not really moved. so we have had several meetings

at brookings. other people have had meetings. so, the obama administration decided they were just going to move. so they are taking the results of all of these various studies. they considered -- they had meetings across the country and they will define a new poverty measure. this poverty measure, this is crucial, will not be the official. it will be published for the first time in fall of 2011 and it will take into account how much it will cost to have adequate food, clothing, housing, utilities. there will be consideration of geographical differences. there will be consideration of spending for medical care come out of pocket. it will change the definition of poverty and generally speaking there will be a few more people who did not meet this line, and baron lies the controversy. some people did not want more people in part because they say it is an argument for more benefits. it is not official, and it would be many, many years. it will not affect any benefits

distributed to states or individuals. host: at georgia, gregg on the independent line. caller: i had this question. i have had it for a long time. i keep hearing people talking about the insurance companies, health insurance companies, they take one-third of the money they received to pay for administrative costs, advertising, and profit. my question is, how much of the money that the federal government takes out of my pocket that goes through the process actually reaches the individual or the project on the grounds? what percentage of the money? guest: the federal government spends money in many different ways. i can talk with most knowledge about the welfare programs. typically in the welfare programs, that as virtual -- there is no -- virtually none that have 10 percent

administrative costs but most are 5% or below. in the welfare programs, a very high percentage of the money that the government gets from taxpayers actually goes to people who get the benefit. there are some exceptions. there is some cheating. there is a big program called the earned income tax credit that we talked about before, there are some overpayments in that program and they are way above 10% or 15% but the administrative costs are very low. the internal revenue service does a great job with the program. i would say the administrative costs are no more than 3% or 4%. host: maryland, maryann. caller: how are you, hun. mr. haskins, you just said and light. i worked for walmart -- i was forced to quit because there was a lady who came into the store with a card, the food stamp card, a debit card, and she kept

telling me i've got money on this card. i said, before i can help you, you've got to buy something. she went and got a cellphone and brought up to me. it would not go through. however, the black supervisor turned the key and it went through it and she got her $100 back. she said, i need two more hundred. the supervisor told her, go get a candy bar and i will ring up each transaction. she got $300 off of that debit card, plus she also got the cellphone. now, i'm asking you, i am 70 years old and i lost my job and i'm living on $1,000 a month from social security. i worked since i was 16 and i went and i asked to help me because i had build and rent -- they turned me down. they said i'm already getting

money from the government. no, i worked for that money. i work for my social security. i am 70 years old and i could not even get $5 for food. i am living right now on $20 a month on food. now, you tell me -- this is maryland. but i can tell you, it is not fair. and i thank you so much. guest: i agree, it does not sound fair to me the way you describe it. it is certainly not fair that the supervisor fired you for trying to uphold the law and then the supervisor broke the laws. you cannot buy things like cameras. there is no such thing as a foolproof system. unless the federal government had an fbi agent in every wal- mart, k-mart, grocery store, how could we know about these things? many of our programs depend on a basic level of honesty on both the people who receive it and the administrators to get the money. 99.9% of the cases they are

honest. in a case you just described, they were not in the complicated it even more for some reason i firing you. that is certainly not fair. i did not know exactly your whole circumstance so i cannot reflect on the food stamps, but i can tell you this, the food stamp criteria of how to make decisions on who gets food stamps and who does not are completely objective. in most places the program is barely -- very fairly administered. you may not like the requirements and the costs, and maybe you think people with more income should be eligible for food stamps, but that is a different issue than the fairness. the program is fair in this sense that it has carefully define qualifications and they are generally speaking equally applied. host: ballston, -- boston, democrats line. caller: until i became a part of the pool of job seekers i was an

executive in the public work force system offering -- i would hate to see the work force investment act not be represented in the conversation. i mean question is, i am curious why the obama administration and, frankly, previous administrations have not embraced reauthorization to get people reemployed or trains -- trained. it is underrepresented program. it helps people get jobs, connect to training, especially in in demand jobs that are desperate to find workers. when people say there are not jobs, there are jobs but there is a major skills gap. we were designed to take care of that but yet the reauthorization of the funding has just -- and the funding has been ignored for the last five years. host: i will jump in because our time is short. the workforce investment act is on that list. the funding level is $321

million. tell us more. guest: department of labour -- $10 billion this year. the money is focused primarily on low income families and people who are unemployed. and the program, even though -- here is the confusion. when you reauthorize the program you basically open up the statute and congress can do anything it wants to. it can amend the program, repeal the program, change and whether -- do whatever it wants. often because of this leads to such a big battles and congress is busy -- because this leads to such a big battles and congress is busy with health care, they will do what is called extending the program. it has not been reauthorized of the funding has been continued so the program continues to operate. it is rare that a program is authorized and congress cannot reauthorized it. it is just the money is not continued.

that is what happens. no changes in the statute. it is not an unusual thing. wia is somewhat controversial but i think it is more congress has not got around to do it but the money still flows. host: administered by the department of agriculture, correct? how about unemployment insurance -- does the department of labour and the states. host: how about the cash -- guest: health and human services. there have always been some people, and i think more and more every year, who think we have too many programs and to many departments. you just mentioned the big ones. we have 1000 programs. host: literally? guest: literally 1000, yes. we should have fewer programs. some of these are because the way congress operates and a member of congress who is powerful ones to have a certain

program and they get it through we would do better if we had fewer programs. they would be easier to administer at the federal and state level. host: sylvia, independent. we have 30 seconds. caller: will there be an unemployment next month for those of us in ohio? i heard it would probably end of the end of this month unless they pass another bill, and nine runs out in seven weeks. host: sylvia, thank you. guest: yes, the bill passed. host: thank you very much for being here. complex, a lot of programs, but you have given us a top line view of the largest ones. it is now time for us in this thursday morning to take you to live coverage to the house of representatives and in line with our discussion the they will be talking about the jobs program. it is technically a hiring incentive to the restore employment act, which was conferring with something that conferring with something that happened already in the united